Top 5 Refinancing Tips Every Contractor and…

Thank you again for providing your Pearl Solar Certification. We received our appraisal back on Friday for our refinance and learned our house was valued $20k-$25k higher than we anticipated. We are really grateful for the Pearl Certification for increasing the value of our home.

David Pearl-Certified Homeowner, Utah

As a Pearl Network Contractor, you know Pearl captures and communicates the value of the work you do. You’ve also probably heard Pearl-certified homes sell for 5% more, on average, when properly marketed. But did you know Pearl can also play an important role in the refinance process? With historically low interest rates, many of your customers may be considering refinancing their homes right now.

Read on to learn how we can help you and your customers get the value you deserve for your high-performing home during a refinance.

A Little Background

Not all contractors are the same. That fact is one reason why Pearl partners with the highest quality contractors to form the Pearl Network. Unsurprisingly, not all appraisers are the same either. Some appraisers know how to properly value high-performing homes — others do not. And just like contractors, highly qualified appraisers can be undercut by low-ball (and low quality) competition.

Appraisers are hired by the lending institution, not the homeowner. If the bank is unaware of the unique, high-performing features of the home, they will usually select the appraiser with the lowest bid.

But the lending institution is required to hire a qualified appraiser. That’s why every Pearl Certification is issued with the Letter to the Lender. That letter puts the lender on notice that the property is special, and they need to hire an appraiser with proper skills.

So what should you do to ensure a high-performing home is properly valued when appraised?

Here are Pearl’s top five refinancing tips every contractor and homeowner should know:

1. Start the process early.

Deliver the following Pearl-provided documents to your loan officer as soon as possible:

Letter to the Lender
Letter to the Appraiser
Certification Report (which includes the Appraisal Institute’s Green and Energy Efficiency Addendum).

The loan officer should then deliver all these documents to the lender’s appraisal department and they should be included in the scope of services performed by the appraiser.

2. Contact Pearl to make the home visible in our Registry.

Appraisers can search for Pearl-certified homes in Pearl’s Registry. Pearl’s Privacy Policy requires that a homeowner opt-in by giving Pearl permission to make the home visible to the public.

3. Be a resource and ask the appraiser some basic questions.

When scheduling the appointment with the appraiser, ask if they were informed that the home has high-performing features and if they received the Appraisal Institute’s Green and Energy Efficiency Addendum. Inform them that the home is Pearl Certified and offer to email them the Letter to the Appraiser so they can learn more about your home.

4. Print the letters and Pearl Certification report so they are available when the appraiser does their job.

Don’t assume that the lender provided the documentation. You may also include receipts, invoices, and other information that can help the appraiser determine valuation.

5. Don’t try to do the appraiser’s job or tell them how they should do it.

They are hired by the lender, and their responsibility is to their client. If you feel that the appraiser did not take relevant information into consideration, contact your lender. There are ways to file a formal reconsideration of value when appropriate. Pearl is also a resource. We are working with some of the nation’s leading appraisers to develop additional guidance and best practices for the appraisal community.

Take-Aways

A home’s high-performing features should be made highly visible and appropriately presented to an appraiser. If the appraiser doesn’t know these features exist, that value will not be added.

And what happens if the appraiser knows about these features and still doesn’t add value? They are put on notice that they are responsible to justify that valuation. The lender is also notified that it may not have selected a qualified appraiser.

Have any of your customers had a successful refinance or a lucrative high-performing home sale experience? Or an unsatisfactory one? Please let us know so we can celebrate successes and help with problems you’ve experienced. We’ve already created several resources on this topic too — so check out the links below to learn more.

Top 5 Refinancing Tips Every Contractor and Homeowner Should Know